Kings Row Centre [2009] QBCCMCmr 348 (11 September 2009)

Last Updated: 9 October 2009

REFERENCE: 0423-2009

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	11632
Name of Scheme:	Kings Row Centre
Address of Scheme:	1 / 20 Commodore Drive PARADISE WATERS QLD 4217

TAKE NOTICE that pursuant to an application made under the abovementioned Act by

Diana MacKenzie (Harsh), an Owner(s) of lot 5

I hereby order that the application is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0423-2009

“Kings Row Centre” CTS 11632

Application

Kings Row Centre Community Titles Scheme (KRC) is a 65 lot scheme under the Body Corporate and Community Management Act 1997 (Act) and the Act’s Standard Module Regulation (Standard Module).

This application is by Diana McKenzie, an owner of lot 5 (applicant) seeking orders against the body corporate for KRC (respondent). The applicant alleges that the body corporate is making retrospective laws that result in a threat of her husband’s boat being put off the marina after three months.

Decision

Submissions

The main grounds in support of the application, provided on behalf of the applicant, were to the effect that:

• They purchased in May 2003 and understand they were subject to the Act and by-laws that were relevant at the time they purchased;
• The committee’s practice and by-laws at the time allowed for continual occupancy subject to payment of the levy, maintenance of the area, and supply of registrations and insurances; and
• The committee attempted to terminate their licence to occupy without justification and contrary to the relevant by-laws.
  

The body corporate was given an opportunity to provide written submissions. The main submissions by the body corporate were to the effect that:

• The applicant has no standing to make the application as the vessel in question is not owned by her;
• The committee is not seeking to have Mr McKenzie’s vessel removed as claimed. However, the committee requires that he pays the rent and abides by the conditions of the agreement and by-laws; and
• Up until 1 May 2009 Mr McKenzie did not have a formal lease but paid rental on a quarterly basis. The lease was therefore terminable on 3 months notice. The body corporate does not have the power to grant a lease for life and the body corporate is currently offering Mr McKenzie the same lease term as he had prior to 1 May 2009.
  

The applicant took the opportunity to inspect the body corporate’s submissions but did not make a reply.

Applicable law

Legislation relevant to the present dispute has provisions to the effect that:

• Body corporate assets are items of real or personal property and may consist of any property an individual is capable of acquiring (Act, 11);
• The body corporate must administer the common property and body corporate assets reasonably and for the benefit of owners (Act 94, 152)
• A by-law comes into force on the day the registrar records the community management statement containing the by-law or a later date stated in the by-law and take effect as mutual covenants (Act 179, 59);
• The consent to the recording of a new community management statement with changed by-laws normally requires the consent of the body corporate in the form of a special resolution (Act, 62(3));
• A body corporate may lease a body corporate asset for a term of up to three years if authorised by special resolution (Standard Module, 167); and
• A body corporate may lease part of the common property for a term of up to three years if authorised by special resolution (Standard Module, 161).

Findings

I note that the applicant has not disputed the body corporate’s submissions and I accept those submissions to be correct. In particular, I am not satisfied that the body corporate has been acting unreasonably or asserting trivial breaches against Mr McKenzie as the owner of the boat.

The main issues for determination are whether, as a matter of law:

1. The applicant has standing to make the present application;
2. The body corporate is bound to deal with the marina berth according to the by-laws in place at the time the applicant bought her lot; or
3. The body corporate has permanently leased the marina berth in question and cannot now change those arrangements.

1. Standing to make application

I accept that the applicant is not the owner of the boat that is the subject of the dispute. However, as an owner in the scheme, the applicant is entitled to challenge the way in which the body corporate administers the common property and body corporate assets. On this basis, I am satisfied the applicant has standing to make the present application.

2. By-laws at time of purchase irrelevant

The applicant is bound by the by-laws for the scheme that are recorded from time to time (Act 59, 62, 179). There are no circumstances raised in the application that justify owners being prevented from changing their by-laws. Similarly, there are no circumstances that indicate the present by-laws are invalid. It is therefore irrelevant that the by-laws were different at the time the applicant purchased her lot as those by-laws were always subject to change by a vote of owners and it is only the present by-laws that are relevant to the present dispute.

3. No permanent lease

Based on the submissions, I accept that the informal arrangements made by the body corporate to lease the marina prior to 2009 did not involve a lease for life or any fixed term. Rather, I accept that the arrangements for payment on a quarterly basis resulted in a lease terminable on three months notice.

As a matter of law, I note that the body corporate would need to pass a special resolution before granting a lease for more than three years (Standard Module 161, 167).

Conclusions

I am satisfied that the body corporate is entitled to lease the marina berths as part of its general functions of administering the common property and body corporate assets reasonably and for the benefit of owners.

In particular, the applicant has not satisfied me that the present by-law 30 is invalid or that there is any basis for granting any of the relief sought. Even if the applicant assumed that permission to use the marina was on a permanent basis I consider there to be no legal justification for this belief. The body corporate is entitled to adopt new by-laws relating to the administration of the marina and these by-laws relate to the administration of the marina from the time they were recorded on 24 April 2009 rather than having any retrospective operation.

Order

For these reasons, the application is dismissed.